Silicon Valley Bank shut its doors last week after over forty years of service. Even though the fateful news has left many institutions and investors in huge shock, its downfall has attracted stiff contest within several banking institutions.
Fintech Firms Starts To Mop Up Silicon Valley Bank Deposits
Based on a short Market analysis, the downfall of Silicon Valley Bank has accelerated banking adoption, with billions of dollars of deposits funneled into digital banking platforms just a few days after its fallout.
Over the weekend, just a few hours after the downfall of Silicon Valley Bank, many digital banks began making payroll. Hours later, they were able to launch emergency payroll financing products. The digital banks aimed to tease the struggling entrepreneurs and their staff who were left stranded.
Furthermore, in a matter of days, several rival fintech firms have established a level of goodwill with large tech companies, thus accelerating the shift away from traditional banks to fintech startups.
Silicon Valley Bank’s Clients Shift To Other Fintech Firms
Fintech firms, including Ark, a multinational software bank, have begun receiving clients who previously held their cash in the fallen Silicon Valley Bank. The Ark will help its customers to manage their deposits amid the regulatory environment.
In that context, Art will offer its customers up to $2.75 million in FDIC insurance. All excess fund will be invested instantly in government-backed T-Bills yielding 5%+ APY through Arc’s SaaS platform. Other fintechs eying to win Silicon Valley Bank tech customers include Mercury and Brex.
In upcoming weeks, several fintechs will even begin offering long-dated government-backed securities and venture capital-backed loans with no collateral to startups, aiming to win more Silicon Valley Bank’s abandoned customers.
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